Beautifully engraved specimen certificate from the Triton Network Systems . This historic document has an
ornate border around it with a vignette of the company's logo. This item has the printed signatures of the Company’s President/CEO (Skip Speaks) and Senior Vice President/CFO.
The company made broadband wireless equipment for consecutive-point networks. Triton's units, for which it claimed reliability equal to fiber-optic networks and higher than point-to-point wireless networks, consisted of a transmitter, receiver, modem, and network card and were based around microchip technology licensed from Lockheed Martin. Triton sold its equipment directly to service providers and equipment makers. Struggling with the downturn in the networking and telecommunications markets and failing to find a buyer for the company, Triton is liquidating its assets, winding down operations, and closing its doors.
Triton Network Systems, Inc. Announces Plans to Liquidate
ORLANDO, Fla., Aug 20, 2001 (BUSINESS WIRE) -- Triton Networks Systems, Inc. (Nasdaq:TNSI) announced today that its Board of Directors has unanimously voted to liquidate and dissolve the Company, subject to approval by the holders of a majority of its outstanding shares. Subject to stockholder approval of a Plan of Liquidation and Dissolution, the Company plans to sell its assets, including inventory, property and equipment and intellectual property, discharge its liabilities, and distribute the net proceeds to stockholders. Based on current information, the Company estimates that assets available for distribution to stockholders will be between $0.75 and $0.95 per share.
Pending final stockholder action, the Company has begun making preparations for the orderly wind down of its operations, including headcount reductions, securing continuing support for its existing customers, seeking purchasers for the sale of its intellectual property and other tangible and intangible assets, and providing for its outstanding and potential liabilities. Additionally, the Company is evaluating an expression of interest received today from a third party for the cash purchase of all of the outstanding stock of the Company. Since the prospective purchaser must first complete its investigation of the Company's business, these discussions may not result in a purchase offer.
In light of the Board of Directors' decision, Skip Speaks, President and Chief Executive Officer; Mark Johnson, Chief Operating Officer; Michael Clark, Vice President of Engineering and Dan Gulliford, Vice President of Product Development have resigned effective August 20, 2001. Mr. Speaks has agreed to remain on the Company's Board of Directors. The Company's Chief Financial Officer, Ken Vines, has been appointed Chief Executive Officer.
Subject to the outcome of the discussions with the prospective third party purchaser, the Board currently intends to call a special meeting of the stockholders, expected to be held in early October 2001, to approve the Plan of Liquidation and Dissolution. A Proxy statement describing the Plan would be mailed to stockholders approximately 30 days prior to the meeting.
In reaching its decision that the liquidation and dissolution of the Company would be in the best interests of the stockholders, the Board of Directors considered a number of factors, including the Company's recent financial performance, prevailing economic conditions and unsuccessful efforts to sell or merge the Company. Early this year there was a rapid deterioration in the market for fixed broadband wireless access equipment, particularly in the U.S. By the second quarter, three of the four major fixed wireless CLEC's in the U.S. had filed for bankruptcy protection. The Company's revenue had declined from $9.5 million in the fourth quarter of 2000 to $1.9 million in the second quarter of 2001, and the net loss for the first half of 2001 was $(40.6) million. Based on these conditions, the Company significantly downsized its operations to reduce costs and conserve cash, while reviewing alternative business strategies.
In January 2001, the Company engaged Broadview International to assist in identifying and evaluating strategic alternatives, including the sale or merger of the Company. Broadview contacted a large number of prospective acquirers or merger partners, both domestic and international. Discussions were held with a number of companies. After a careful review, the Board of Directors concluded that none of the acquisition or merger opportunities available to the Company would be likely to provide stockholders with as much liquidity or value as could be achieved through a liquidation and dissolution. As stated above, the Company has not had time to evaluate the expression of interest received today from a prospective purchaser.
The Board of Directors also considered whether to continue the current strategy of maintaining operations, managing expenses and waiting for a market recovery. There were a number of risks associated with such a strategy. Timing of a market recovery remains cloudy, and it now appears likely that there will be a protracted period of weak demand for the Company's products. At the current time, the Company has a minimal backlog of customer orders, and prospects for material revenue over the next few quarters is limited. Although the Company has the financial resources to weather a lengthy market downturn, significant amounts of cash would be required to continue operations and remain competitive, including significant expenditures to develop international sales channels and to support research and development activities needed to enhance existing products and develop new products. Furthermore, employee retention would continue to become increasingly difficult. In light of these risks, there is a substantial possibility that a strategy of waiting for a market recovery would cause a continued erosion of the Company's cash, asset value and employee base, thus reducing stockholder value without any assurance of a future recovery. In addition, the Company's stock is trading below the anticipated cash liquidation value of the shares. For these reasons, the Board of Directors concluded that liquidation and dissolution of the Company would have the highest probability of returning the greatest value to the stockholders.
If the Company's stockholders approve the Plan of Liquidation and Dissolution, the Company will file a Certificate of Dissolution promptly after the stockholders vote, and stockholders will then be entitled to share in the liquidation proceeds based upon their proportionate ownership at that time. Under Delaware law, the Company will remain in existence as a non-operating entity for three years from the date the Company files a Certificate of Dissolution in Delaware, and will maintain a certain level of liquid assets to cover any remaining liabilities and pay operating costs during the dissolution period. During the dissolution period, the Company will attempt to convert its remaining assets to cash and settle its liabilities as expeditiously as possible.
Assuming stockholder approval of the Plan, the Board of Directors currently anticipates that an initial distribution of liquidation proceeds will be made to stockholders within 75 days after the stockholders' meeting. A portion of the Company's assets will be held in a contingency reserve, and the Board of Directors anticipates that stockholders could periodically receive additional distributions subsequent to the initial distribution.
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